Short-term technical outlook on EUR/JPY (Thurs 07 Jun)
Key technical elements
- Since our previous “Chart of the day” report dated on 30 May 2018, the EUR/JPY cross pair had rallied as expected and met the short-term resistances/targets at 127.20 and 128.50. Current price action indicates the pair has continued to evolve within a minor ascending channel in place since 30 May 2018 (depicted in green, see 1 hour chart).
- The daily RSI oscillator remains positive and still has room to manoeuvre to the upside before it reaches its corresponding resistance at the 69 level. This observation suggests that upside momentum of price action remains intact.
- The key short-term support rests at 128.95 which is defined by the former minor swing high area of 23/24 May 2018, the lower boundary of the minor ascending channel from 30 May 2018 lower and close to the 23.6% Fibonacci retracement of the on-going minor up move from 30 May 2018 low to today, 07 Jun European session current intraday high of 130.13.
- The significant intermediate resistances stand at 131.10/35 which is defined by the medium-term descending channel resistance that has capped previous up move since Feb 2018, the upper boundary of the minor ascending channel, minor swing high areas of 14 May/22 May 2018 and a Fibonacci projection cluster (see 1 hour chart).
- The hourly Stochastic oscillator is now coming close to an extreme overbought level of 93 which highlights the risk of a minor pull-back towards its intermediate support at 129.40.
Key Levels (1 to 3 days)
Intermediate support: 129.40
Pivot (key support): 128.95
Next supports: 127.90 & 127.30
Therefore, as long as the 128.95 key short-term pivotal support holds, the EUR/JPY is likely to stage another upleg to target the next intermediate resistance at 131.10/35.
However, a break below 128.95 (an hourly close below it) negates the bullish tone to kickstart of deeper pull-back/consolidation towards the next supports at 127.90 and even 127.30 next (the minor swing low areas of 04/05 Jun 2018 & the 38.2%/50% Fibonacci retracement of of the on-going minor up move from 30 May 2018 low to today, 07 Jun European session current intraday high of 130.13).
Charts are from eSignal
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